Xcel ch 3

which contract element is insurable interest the component of?

legal purpose

the insurance company agrees to pay a predetermined amount - the face amount, in exchange for consideration (premium)

life insurance

according to the principle of utmost good faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, the insurer will deal fairly with the insured and it's

promises made

order an applicant's statements concerning occupation, hobbies, and personal health history regarded as?

representation

in a life or health insurance contract, "consideration" would be the

statements made in the application and the premium

under a contract of adhesion,

the terms must be accepted or rejected in full

legal purpose is a term used in contract law meaning

there must be legal reasons for entering into the contract

life insurance contracts are valid contracts, which means it will pay a stated amount

valued contract

Consideration

what both insured and insurer promises to bring to a contract something of legal value given in exchange for a promise

four elements of a contract

1. consideration 2. legal purpose 3. offer and acceptance 4. competent parties

health insurance contracts are Indemnity contracts and will only reimburse the actual cost of the loss (pay medical bills Etc)

Indemnity contract you cannot profit from an Indemnity contract

the following BEST describes a conditional insurance contract?

a contract that requires certain conditions or acts by the insured individual

insurable interest does NOT occur in which of the following relationships?

business owner and business client CORRECT: sister and brother, parents and children, business partners

all the following are elements of an insurance policy EXCEPT

claim forms CORRECT: definitions, other insurance, conditions

The Authority granted to a licensed producer is provided via

law of agency according to the law of agency, the producer/agent represents the principal/insurer and is granted actual, implied and apparent authority to act on behalf of the insurer. The law of agency makes the principal responsible for these acts of the agent.

in an insurance contract, the element that shows each party is giving something of value is called

consideration

which type of clause describes the following statement: "we have issued the policy in consideration of the representations in your applications and payment of the first term premium".

consideration clause

In order for contract to be valid, it must

contain an offer and acceptance

a professional liability for which producers can be sued for mistakes of putting a policy into effect is called

errors and omissions

the insurance company agrees to pay a percentage of the insurance medical bills in exchange for consideration (premiums)

health insurance

who is responsible for assembling the policy forms for insureds?

insurance carriers

ambiguities in an insurance policy are always resolved in favor of the

insured

what makes an insurance policy a unilateral contract?

only the insurer is legally bound